Tax package officially a complete disaster w/ Gov. vetoes

The tax package that had managed to get through the New Mexico Legislature was dramatically altered (yet again), this time by Gov. Lujan Grisham. We haven’t seen the actual signing statement but according to Dan Boyd of the Albuquerque Journal, the Gov. eliminated the tax hikes on alcohol and eliminated subsidies for electric vehicles (we applaud her for those).

On the other hand she eliminated income tax rate reductions at lower income levels and also killed a phase in GRT cut of 0.5%. Both of these are unfortunate moves and from a revenue perspective the GRT reductions were the most impactful provisions in the Legislature-passed bill.

More generous film subsidies as well as tax hikes on tobacco, corporate income, and capital gains will make their way into law. Indexing of capital gains to inflation and elimination of GRT on deductibles and co-pays also made it through.

The Gov. cited concerns about the sustainability of enacting tax cuts, but showed no such concern about film subsidies OR the 14 percent budget increase she just signed.